Home » Business » SMEs Feel the Heat

Most of them are unkempt and clad sloppily in tattered apparel showing signs of long periods of not bathing.

ONE is swamped by a horde of merchandisers who, amid a cacophony of clamour and clatter, compete to outdo each other in the frenetic battle to woo a customer.

Most of them are unkempt and clad sloppily in tattered apparel showing signs of long periods of not bathing.

They mercilessly push and shove each other to position themselves at vantage points with prospective buyers.

But if the commotion outside is something to worry about, then what happens inside can best be described as horror.

Once one walks past the small gate, they are greeted by terrible chaos — a mixture of perennial shouts, and ear piercing thud of different tools and obscene talk.

The place is so overcrowded that there is virtually no walking space in an area where too much is made of the little space available.

Some of the structures housing the different wares look like they could be blown away by even the mildest of a gale, yet they still stand.

This is how daily life is like at this famous furniture manufacturing hub on the outskirts of Glen View, the populous suburb in Harare — commonly known as the Complex.

The filth here is so off-putting that from a distance, one gets repulsed and could be easily tempted to conclude that nothing worthwhile can come out of it.

Yet, from this otherwise repugnant establishment, many a home in Harare and elsewhere across the country have been furnished.

It turns out, as one snakes around this mass of human confusion and filth, that it is actually a centre of furniture excellence in Zimbabwe.

Established in 2005, this complex offered hope to the unemployed and skilled craftsmen who freely exhibit their talents and is ideally a perfect refuge from nagging poverty.

The fact that the most opulent of houses are bettered by their craftsmanship is testimony to their brilliance, yet this enterprising lot is plagued like most brilliants by exploitation with no one to salvage the disastrous situation for them.

For the last 10 years, the complex has been home to thousands of small entrepreneurs who manufacture a wide variety of house furniture products ranging from sofas, wardrobes, beds, chairs and much more.

While government would be glad to take all the plaudits for the existence of this flourishing project which has become a small industrial site in its own right and has become a platform which promotes income generation, mostly for the youths, a whole new vice has crept in which has left the craftsmen bewildered and authorities hapless.

The Financial Gazette has established that the men and women here toil all day long to make furniture products for a living, but unfortunately the fruit of their sweat is enjoyed far away from their dusty working cabins and proceeds are revolving nowhere nearer their rented residential lodgings.

They have come under siege from big furniture companies operating in the central business district (CBD) of Harare to whom the creation of the complex is a port where quality products can be accessed at ridiculously cheap prices only to be resold at exorbitant prices to unsuspecting buyers.

And when they go for orders, they dictate the terms and leave the furniture makers with no option but settle for the little that can accumulate into their thin pockets while they line other people’s.

The emergency of these retailers has also given birth to callous middlemen who broker sales deals and cripple operations.

In the end, the poor craftsman has no choice but keep with the terms in this crooked survival war in which the most cunning emerge winners.

This new trend is disaantaging both the entrepreneurs and the customers.

The craftsmen know very well that they are being shortchanged but have no clue as to how to avoid the naked exploitation.

“Many people claiming to be shop representatives come to buy our products. They take aantage of stiff competition here and offer very little money for our products and we end up giving in because we desperately need cash,” says Kennias Magodo who has manufactured beds here since the complex was established.

“If you go in town, you will see a lot of our products selling at prices three or four times higher than they buy them from here. For example, I sell a double bed for US$140 but the same bed will be selling for US$400 in the city centre which is pure exploitation,” he added.

Asked why they would allow such plain exploitation to persist, Luke Mashava, who manufactures wardrobes and kitchen units said: “We have no choice. It is very hard to get direct customers here. What makes us more vulnerable is that there is stiff competition which works to the aantage of the buyers.

“Once someone accepts their offer, everyone ends up giving in. It is better to have the small profit than keep the product for the whole year.”

To gain maximum profitability, some retailers actually repackage the products, attaching acclaimed labels that woo buyers.

A scan around the mushrooming furnishers in the CBD seemed to prove that they are making a killing out of the craftsmen.

In one shop, the same sofas selling at US$350 at the complex were going for as much as US$800 while others went for well over US$1 000.

This means they get profits as high as US$300 per product while those who labored for the same item struggle to break even.

A manager in one of the shops confirmed that they get their merchandise from the complex but said the high prices were justifiable because of the high municipal rates, rentals and tax payments they incur as compared to the informal traders.

Many at the Complex said they have been in business for years but have virtually nothing to show for their hard labour save for the scared fingers.

Director of business development in the Ministry of Small and Medium Enterprises and Co-operative Development, David Nyakonda, said there was very little they could do about it since it involves selling agreements.

“They enter into agreements and sell the properties out of their will so there is no part the ministry plays there,” he said.

He, however, encouraged the manufacturers to find innovative ways in order to survive.

This predicament might be more devastating for these particular artisans, but it is felt right across all sectors.

The 2011 Zimbabwe Vulnerability Assessment Committee Report on urban livelihoods says about 47 percent of the economically active populations in the urban areas derive their income from self-employment.

The figure might have evidently grown much bigger given that for the past four years, many companies have laid off workers en masse, releasing them into the informal sector, thereby further straining the situation.

Those in the clothing sector have particularly been crying foul over cheap imported clothes at whose mercy they have been subjected.

Recent surveys have indicated that the SMEs sector constitutes over 80 percent of ’employment’.

Therefore, their contribution to the mainstream economic activities cannot be overestimated, hence the need to devise strategies that might help grow them.

newsdesk@fingaz.co

Source : Financial Gazette

Archives